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Microsoft Reported Readying $1 Billion Yammer Acquisition
Microsoft Reported Readying $1 Billion Yammer Acquisition
By Jennifer LeClaire / NewsFactor Network Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
Google bought YouTube. Facebook bought Instagram. Now, some are saying Microsoft is about to buy Yammer.

Microsoft is in talks to acquire Yammer in what is reported to be a blockbuster deal. According to Bloomberg, Redmond plans to pay more than $1 billion for the enterprise social network.

Yammer promises to bring the power of social networking to the enterprise in a private and secure environment that is as easy to use as Facebook and Twitter, yet designed for business collaboration. Bloomberg is citing two anonymous "people familiar with the matter" in its report.

Could Microsoft Retain Yammer Talent?

Microsoft could not immediately be reached for comment. Shelley Risk at Yammer told us, "We don't comment on rumor or speculation, sorry." But we caught up with Rob Enderle, principal analyst at the Enderle Group, to get his take on the rumors. He told us Microsoft could be trying to compete with Oracle.

"If you really want to build social media into a series of products, then you buy a company that's doing it successfully, because you need that skillset. The challenge for Microsoft in buying a company like this is retaining the people. They've had a poor history with that," Enderle said.

"Microsoft tends to buy a company and get the technology but they haven't been able to keep the people. To make an acquisition like Yammer work, Microsoft would really need to retain the talent."

Targeting Oracle?

If recent market moves are any indicator, the rumor could be true. Microsoft and Yammer got a little cozier in April. That's when Yammer integrated with Microsoft Dynamics CRM, which enables updates from the CRM solution to appear as activity stories in the Yammer Ticker.

Dynamics users who have installed the plug-in can follow important records such as accounts, campaigns and opportunities. When changes to these records occur, an activity story describing the event is published in Ticker in real-time. For example, when a sales rep closes a deal, a Dynamics activity story announcing the win is surfaced in Ticker, notifying managers as it happens.

But Microsoft may be looking to integrate Yammer's social networking technology across more of its products. If Microsoft does buy Yammer, it would be going head to head with the likes of Oracle and Salesforce.com. Oracle recently snapped up Virtue and Collective Intellect, both of which analyze social media site data. And Salesforce.com made big headlines recently when it snapped up Buddy Media for $745 million.

"Right now, building social into products, particularly customer-facing products, is the big thing," Enderle said. "If you don't have that, it's hard to compete."

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